The fund, which will be worth RM60 million, is a result of a public-private partnership MOU between Cradle and e-government services provider, My E.G. Services Bhd (MyEG) and will be disbursed through a privately owned company, CF1.

In the MOU, Cradle will invest RM 40 million while MyEG brings in another RM 20 million into the fund.
Cradle is planning to incorporate a private limited company called Cradle Seed Ventures (CSV), which will be responsible for mining deal flows and selecting recipients for CF1.

Nazrin Hassan, group chief executive officer of Cradle, said the new company is aimed at preparing Cradle to enter the equity investment market and to address the lack of venture capital funding in the early stages.
“With this fund, we can provide an alternative to local technology startups and stem the outflow of early stage deals to Singapore,” he said.

“Cradle has been successful in providing funding via grants and this would be a natural evolution for us to enter into the venture capital space by providing early growth stage funding,” Nazrin said adding that CSV will also help Cradle be more sustainable in its efforts to play a more active role in bringing up technology startups.

Once established, CF1 will be disbursed in amounts of between RM1 million and RM3 million to innovative high potential technology startups particularly in the Information Communications Technology (ICT), telecommunications and engineering fields within the specified National Key Economic Areas (NKEA), namely electrical and electronics, healthcare, business services, financial services, wholesale and retail; and medical.

Up to 30% of the fund can also be used to fund overseas startups with the intention of bringing talent and technology knowledge back to Malaysia.

“With this, we hope to also strengthen Malaysia’s pool of knowledge workers that will enable Malaysia to be competitive in terms of innovation advancement in South East Asia,” said Nazrin.

He added that Cradle has found a good partner in MyEG who shares similar views in building the early stage ecosystem.

“We also felt that MyEG has the experience to add value to CF1. In its 13 years experience of enabling the delivery of e-services to Malaysians in a convenient yet secure manner, we believe MyEG can better work with us to engage both the Government and public sector on how to further improve the development of Malaysian technology startups,” he said.

This would not be the first time Cradle and MyEG are joining hands to support promising startups. The two organisations have been funding finalists from the business pitch television show, Make the Pitch, since 2011.

Among the companies they have collaborated to fund are Fashionvalet, I-Money and Piktochart.

“We have been collaborating to support startups for a while now, so I think it is only logical that we partner up again to help startups but this this time on a larger scale,” Nazrin said.

Dato’ Dr Norraesah Hj Mohamad, MyEG executive chairman said MyEG is happy to collaborate with Cradle in establishing CF1 as both organisations share a common goal of investing in the future leaders of the Malaysian technology industry.

She added that MyEG and Cradle have opened a new door for early stage technopreneurs who are seeking funds and support to bring up their products and businesses.

“Malaysian technopreneurs today have limited avenues to raise early stage capital. Hopefully we can provide an additional avenue for them and help them compete more effectively with their regional counterparts,” Norraesah said.

She also hopes that CF1 will be the leading VC in the region that will invest in many globally competitive and leading edge tech startups.